This office lease clause should be used in a base year lease. This form states that when the building is not at least 95% occupied during all or a portion of any lease year the landlord shall make an appropriate adjustment in accordance with industry standards of the building operating costs. This amount shall be deemed to be the amount of building operating costs for the year.
The Wisconsin Gross Up Clause is an important provision in a Base Year Lease agreement that addresses the responsibility of the tenant and the landlord regarding operating expenses and taxes. This clause ensures that the tenant pays their fair share of the increased costs associated with operating the property. In a Base Year Lease, the Gross Up Clause allows for the adjustment of expenses, such as real estate taxes and common area maintenance (CAM) charges, based on changes in the occupancy level of the property. This provision aims to create an equitable distribution of operating expenses among tenants, especially when there are vacancies or fluctuations in occupancy rates. There are two primary types of Gross Up Clauses commonly used in Wisconsin Base Year Leases: 1. Occupancy-Based Gross Up Clause: This type of Gross Up Clause takes into account the actual occupancy level of the property during the base year. If the property had vacancies during the base year, the expenses would be "grossed up" to reflect a hypothetical level of full occupancy. For example, if the property was 90% occupied during the base year, the expenses would be adjusted to reflect the costs associated with having 100% occupancy. 2. Expense-Based Gross Up Clause: In this type of Gross Up Clause, the expenses are adjusted based on the actual increase in specific operating costs during the base year. This clause allows for the exclusion of certain expenses that may not be directly affected by occupancy changes, such as capital expenditures or tenant-specific expenses. By incorporating a Wisconsin Gross Up Clause in the Base Year Lease, both the tenant and the landlord can ensure a fair allocation of operating expenses. Tenants are protected from paying more than their fair share, while landlords can recover their costs based on the actual occupancy or expense increases during the base year. Wisconsin Gross Up Clause, Base Year Lease, operating expenses, real estate taxes, common area maintenance, CAM charges, equity, occupancy level, vacancies, fluctuation, Occupancy-Based Gross Up Clause, Expense-Based Gross Up Clause, fair allocation, hypothetical occupancy, capital expenditures, tenant-specific expenses.
